AUSTIN, Texas — Mexican drug cartels may be making more money from smuggling fuel than from narcotics, according to testimony from Texas Department of Public Safety officials during a recent Texas Senate hearing on border and homeland security.DPS Director Col. Freeman Martin told lawmakers that Texas has become a major source for illegal fuel trafficking into Mexico. Officials estimate between $12 billion and $21 billion worth of fuel could be smuggled from Texas to Mexico each year.Martin said some law enforcement officials working these cases believe fuel smuggling has surpassed narcotics trafficking as a source of cartel revenue, particularly when federal law enforcement partners are not involved.“I heard you refer to it as the number two revenue generator for the cartels,” Martin said. “In some recent cases without federal partners, some of them that are actually working these cases believe that it’s the No. 1, that it’s exceeded their narcotics trafficking.”Martin said cartels have adapted their smuggling operations, using commercial vehicles and legitimate trade routes to move fuel south.“Rather than loading drugs into produce, furniture and auto parts, and legitimate trade with the United States smuggling north, they’re loading fuel trucks, box trucks, propane trucks or any container that you can think of and hauling it south,” Martin said.According to DPS, empty trucks enter the United States and are loaded with legally purchased, tax-free fuel. The trucks then can deviate from approved routes as the fuel is transported toward Mexico.Officials said the fuel can be blended with cheaper products, while customs documents may be forged or altered before the shipments cross the border.The financial incentive is significant. DPS officials said diesel and other fuel products can sell for two to three times as much in Mexico as they cost in the United States.Officials described the trafficking as an organized criminal operation. They said enforcement efforts should focus on the people coordinating and profiting from the networks rather than only the drivers transporting the fuel.Texas officials are considering additional route restrictions and inspections as they look for ways to disrupt the trafficking operations.The testimony comes as state and federal officials continue to examine the role of organized crime in cross-border fuel trafficking and the potential impact on the Texas fuel market and tax revenue.

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AUSTIN, Texas— Texas lawmakers are taking a fresh look at a tax break for data centers as the cost to taxpayers continues to climb.During a Senate Finance Committee hearing Monday, lawmakers questioned whether a 2013 sales tax exemption for qualifying data centers still makes sense as artificial intelligence fuels rapid industry growth.The incentive cost the state an estimated $14.6 million during the 2014-15 budget cycle. Today, the Texas Comptroller's Office projects that figure will reach $3.3 billion in the 2028-29 biennium.Lawmakers also raised concerns about whether the tax incentive creates enough permanent jobs and whether stronger oversight is needed after a recent state audit found six of 20 data centers reviewed failed to meet certification requirements.Senate Finance Committee Chair Joan Huffman said she plans to introduce legislation next session to revisit the exemption.The review comes as Texas leaders also weigh the impact of data centers on the state's power grid, water supplies and taxpayers amid the rapid expansion of artificial intelligence.